The interesting read of the Big Mac Index …

Now we all know that the Big Mac index, which was invented 1986 by The Economist, is a very simplified and blunt way of evaluating Purchasing Power Parity. Nevertheless, it is an easy to use method of putting current rates quickly into perspective. It is certainly lacking a lot of other important facts as it doesn’t adjust local labour or transport costs, local preferences, rent or average income, to name just a few. But if you take a closer look, with the respective local interest rates in mind, the picture shows some interesting imbalances and potential long-term opportunities.

Agreed, there are much more sophisticated and better indices in place. The point is, if eventually, in the not too far future, governments will start talking about appropriate exchange rates, the old Purchasing Power Parity will be all of a sudden a pretty hot topic again.

Enclosed please find two links, happy to discuss …… 
https://de.statista.com/statistik/daten/studie/199335/umfrage/big-mac-index–weltweiter-preis-fuer-einen-big-mac 
https://www.economist.com/news/2019/07/10/the-big-mac-index